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Plan for pension cuts may hit snag

O.C. supervisors slow efforts to challenge a 2001 deal that increases deputies' retirement pay. A legal memo questions viability of their plan.

September 17, 2007|Christian Berthelsen | Times Staff Writer

Orange County supervisors have slowed the pace of their move toward reducing sheriff's deputies' pensions after receiving a sobering legal opinion questioning the plan's viability.

But people who have seen the legal memo say it doesn't appear to have dissuaded the officials from pursuing their case.

Supervisors originally had planned to vote this Tuesday on selecting a law firm to challenge the 2001 pension agreement. After receiving the memo drafted at their suggestion by an independent attorney, they decided instead to discuss the matter in a closed session Tuesday, possibly postponing a final decision.

The plan to whittle down the pensions stems from a $2.3-billion shortfall Orange County faces in its pension plans during the next 30 years, in part because of generous retirement deals awarded to public employees, which were made more expensive by modest stock returns.

In their first attempt to pare back those costs, supervisors voted to consider suing to invalidate portions of the deputies' agreement that retroactively increases the retirement pay they can receive at age 50.

Some county officials have estimated the deal may be responsible for as much as $550 million of the shortfall. They also contend it may be illegal because it constitutes a gift of public funds and violates the state's constitutional prohibition of deficit spending by the government.

Sheriff's deputies have hired San Francisco law firm Morrison & Foerster to fight the case in court.

The legal memo was drafted at the suggestion of board members who wanted an analysis of the county's chances of legal success. The lawyer who prepared it, Richard Derevan of Snell & Wilmer in Costa Mesa, is not a candidate to represent supervisors in court and has no stake in the case moving forward.

County officials declined to release the opinion, citing attorney-client privilege, and those familiar with its contents agreed to describe it only in general terms on the condition they not be identified. One source said the document highlighted "problems of the case," and another confirmed it posed "tough questions."

Supervisor John Moorlach was critical of the report. "He doesn't spend a lot of time on the constitutional issues," the supervisor said. "So we don't agree."

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christian.berthelsen@latimes.com

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